Only about 10,000 of nearly 300,000 qualified Californians will be able to participate in a new state insurance program for people with high-risk diseases that make them ineligible for private insurance coverage, according to program administrators.
Officials of California's Major Risk Medical Insurance Program, which is to begin in January, said their annual budget of $30 million will severely limit the number of people who could benefit.
The program, funded by tobacco tax revenues, was set up to subsidize the cost of standard commercial medical insurance to a level that would persuade participating insurance companies to cover high-risk individuals with diabetes, cancer, AIDS and other long-term illnesses.
Currently, many such people are refused coverage by insurance companies. The program puts the state Major Risk Medical Insurance Board, which runs the program, in the role of broker for high-risk applicants, negotiating premiums with private insurers such as Kaiser or Blue Cross. The applicants buy their coverage through the program, paying no more than 125% of what someone without a serious medical problem would pay for the same coverage.
That translates into a monthly premium for individual coverage of about $240, according to John Ramey, executive director of the board. Ramey said the board's data indicates that the budget will cover only about 10,000 people.
There is some question about how many people know that the program exists. In a money-saving effort, the board has spent virtually nothing on mailings or other efforts to advertise the program.
At an information hearing Friday, representatives of groups such as Consumer Federation of California, American Diabetes Assn. and various AIDS organizations complained that the program could end up serving "insiders" while failing to reach eligible Californians in under-served minority communities or with illnesses lacking a strong advocacy network.
Ramey said the fairest system seemed to be to accept applicants on a "first-come, first-served basis." He urged the 50 people at the hearing, most of them representatives of advocacy groups or unions, to help get the word out through their newsletters.
Midge Costanza, a former assistant to President Jimmy Carter and now on the community advisory board of Search Alliance, a Los Angeles-based AIDS research group, denounced the program as a "Band-Aid solution." She said she would prefer something that addresses the needs of everyone without adequate health insurance, not just those with chronic medical problems.
Board member Ron Kaldor replied that the program "creates (an insurance) market where none existed before." Even for the select group it is designed to serve, the number of eligible people exceeds "by many, many factors the money we have to spend," Kaldor said.
Only California residents not eligible for Medicare or group coverage are eligible. They must show proof that they were unable to secure adequate private insurance at 125% of standard cost or less, or show that they had coverage denied or involuntarily canceled within the last year.
Ramey said 1,200 people have written to the board requesting an application. Others interested should write to the board requesting an application. The address is 744 P St., Room 1077, Sacramento, CA. 95814.